Find a Santa hat on google images and go to fotoflexer.com. Upload your avatar pic, then upload the Santa hat so they are both in the same editing area. And move the Santa hat in the appropriate location. From here there should be an option to merge the 2 photos together. Do that and save it. Then just replace your old with your new.

At least, thats how I did it. You might have a problem like I posted above with white at the the top, just use paint and color it in.